Ohio – Voluntary Disclosure Program

SALT Report 2404 – The Ohio Department of Taxation issued updated guidance regarding its sales and use tax voluntary disclosure program. The program allows taxpayers with unpaid sales and use tax liabilities to come forward and resolve these liabilities without incurring additional penalties.

Eligibility

Taxpayers are eligible for the voluntary disclosure program if they submit a written voluntary disclosure request to the Division prior to any contact by the Audit Division, the Tax Discovery Division, or the Investigation and Enforcement Division of the Ohio Department of Taxation.

Advantages of a Voluntary Disclosure

In exchange for a taxpayer entering into a voluntary disclosure agreement, the Division will agree to:

  • Waive civil and criminal penalties,
  • Limit liabilities for sales and use tax to the voluntary disclosure period,
  • Not disclose the company’s identity to other parties, and
  • Allow the company to remain anonymous until the signed agreement is returned

Look-Back Period

The look-back period for taxpayers that fail to collect taxes, or who owe tax on their purchases is limited to the 36 months prior to the voluntary disclosure request. However, there is no limit to the look-back period if the taxpayer has collected tax but has failed to remit it to the Department. These taxes will be subject to interest and a 10% penalty.

Requesting a Voluntary Disclosure Agreement

To initiate a voluntary disclosure, the taxpayer or their tax practitioner must complete a Request for Sales and Use Tax Voluntary Disclosure, Ohio form ST VDA. The request can be submitted to the Division either by U.S. mail or by e-mail at SalesVDA©tax.state.oh.us.

Upon receipt of the request, the division will send the taxpayer or their tax practitioner the voluntary disclosure agreement and a letter with instructions on how to complete the voluntary disclosure process. At this point, any audit action by the Audit Division will be deferred until the voluntary disclosure process has been completed or terminated. If the voluntary disclosure process is terminated without an agreement, the Audit Division may proceed with an audit.

For Further Information

Ohio Department of Taxation – Sales and Use Tax Voluntary Disclosure